GAAP revenue of $36.2 million and non-GAAP revenue of $36.7 million,
compared to GAAP and non-GAAP revenue of $29.9 million in the fourth
quarter of 2011

GAAP SaaS revenues of $2.5 million and non-GAAP SaaS revenue of $2.8
million

Product revenue of $16.2 million, compared to $16.8 million in the
fourth quarter of 2011

Services and maintenance revenue of $17.6 million, an increase of $4.5
million, or 34 percent, from $13.1 million in the fourth quarter of
2011

GAAP net income of $1.9 million, or $0.07 per share, compared to a
GAAP net income of $2.3 million, or $0.09 per share, in the fourth
quarter of 2011

On a non-GAAP basis, which excludes share-based compensation,
acquisition-related expense and amortization of intangibles, the company
reported pre-tax net income of $4.5 million, or $0.17 per share, in the
fourth quarter of 2012, compared to non-GAAP pre-tax net income of $3.9
million, or $0.16 per diluted share, in the fourth quarter of 2011.

Guidance Software President and Chief Executive Officer Victor
Limongelli said, “The fourth quarter was our best quarter ever, with
both record revenue and record earnings. We continued to execute on our
'EnCase Everywhere' strategy by adding an all-time high number of 129
new EnCase® Enterprise customers during the fourth quarter and 358
customers for the full year. Our strong performance was further
bolstered by the addition of 20 new EnCase® Cybersecurity customers in
the fourth quarter.

“Over the coming year, we are planning to launch an entirely new product
on the EnCase® Enterprise platform. This new product will be targeted at
the IT Security market and will be unveiled at our CEIC conference in
May. With this new offering and continued expansion of the capabilities
of our existing products, we will make additional investments in sales,
marketing and R&D to position Guidance for long-term growth.”

Limongelli concluded, “Guidance Software is poised for a strong 2013. As
we continue to invest in our product pipeline and the growth of the
Company, we will remain focused on delivering value to both our
customers and shareholders.”

Fourth Quarter 2012 Highlights and Noteworthy Events

The company celebrated its 15th anniversary this past
November. Since its founding, the company has grown to become a market
leader and global standard for digital investigations, with over 500
employees, as well as offices around the world. The company will
culminate its anniversary celebration at its annual Computer and
Enterprise Investigations Conference (CEIC) scheduled to be held May
19-22, 2013 in Orlando, Florida.

In the fourth quarter, the company added 129 new EnCase® Enterprise
customers and 32 new customers of EnCase®eDiscovery or EnCase®
Cybersecurity, which are built on the EnCase® Enterprise platform.
For the full year 2012, the company added 358 EnCase® Enterprise
customers, compared to 285 for full year 2011.

In December 2012, the company debuted its fastest forensic bridge for
forensic imaging in both lab and field environments.

During the fourth quarter, the company also announced the release of
EnCase® Portable Version 4, the simplest to use and most powerful
field investigation tool available for digital investigation teams.
EnCase® Portable allows for complete forensic triage and data
collection in the field for both seasoned forensic professionals and
non-technical personnel. It is compatible with EnCase® Forensic
Version 7.05.

In early January 2013, the company announced the appointment of
Vincent Schiavo as its Senior Vice President of Worldwide Sales. A
veteran of the software industry, Schiavo is responsible for
generating revenue growth across all Guidance Software sales channels
and markets worldwide.

2013 Financial Outlook:

The company is initiating its guidance for the year ended December 31,
2013, as follows:

Revenue is expected to be in the range of $144 million to $148
million, representing year-over-year growth of 10% to 13%

The company will expand sales capacity both internally and in the
field, as well as invest in additional marketing initiatives to better
address the sales opportunity and customer demand for both our EnCase®
eDiscovery and EnCase® Cybersecurity offerings

Non-GAAP pre-tax earnings are expected to be approximately $0.25 to
$0.30 per share

Conference Call Information:

The company will host a conference call today at 2:00 p.m. pacific time,
5:00 p.m. eastern time to discuss its quarterly results. Participants
should call (877) 303-9850 (North America) or (408) 427-3732
(International) and should dial in at least 5 minutes prior to the
conference call.

A webcast and replay of the call may also be found on the Internet
through Guidance Software's Investor Relations website at http://investors.guidancesoftware.com/events.cfm.
Registered users may access this content over the Internet, and there is
no cost to register. If you have not already registered, please do so at
least 15 minutes prior to the start of the conference call.

An audio-only replay of the call will be available by calling (855)
859-2056, passcode 83012081, available from 8:00 pm eastern time,
February 7, 2013, through midnight eastern time, February 14, 2013.

About Guidance Software:

Guidance Software is recognized worldwide as the industry leader in
digital investigative solutions. Its EnCase® platform, with more than
40,000 licenses distributed worldwide, provides the foundation for
government, corporate and law enforcement organizations to conduct
thorough, network-enabled, and court-validated computer investigations
of any kind, such as responding to e-discovery requests, conducting
internal investigations, responding to regulatory inquiries, or
performing data and compliance auditing--all while maintaining the
integrity of the data. The EnCase Enterprise platform is used by
numerous federal, civilian and defense agencies, more than 65 of the
Fortune 100, and thousands attend Guidance Software's renowned training
programs annually. For more information about Guidance Software, visit www.guidancesoftware.com.

EnCase®, EnScript®, FastBloc®, EnCE®, EnCEP®,
CaseCentral®, CaseCentral eDiscovery Cloud® Guidance Software™ and
Tableau™ are registered trademarks or trademarks owned by Guidance
Software in the United States and other jurisdictions and may not be
used without prior written permission. All other trademarks and
copyrights referenced in this press release are the property of their
respective owners.

Notes to Unaudited Condensed Consolidated Statements of Operations:

Guidance Software reports its financial results in accordance with
generally accepted accounting principles, or GAAP. To supplement this
information, we present in this release total non-GAAP revenue, gross
profit, operating expenses, operating income (loss) and net income
(loss), as well as non-GAAP net income (loss) per share. Total non-GAAP
revenue consists of GAAP revenue as reported and adds back the
acquisition-related deferred revenue adjustment booked for GAAP
purposes. Non-GAAP gross profit consists of GAAP gross profit as
reported and adds back the acquisition-related deferred revenue
adjustment and stock-based compensation expense booked for GAAP
purposes. Non-GAAP operating income (loss) consists of GAAP operating
income (loss) as reported and adds back the acquisition-related deferred
revenue adjustment booked for GAAP purposes and excludes amortization of
intangibles, acquisition-related expenses, share-based compensation
expense, and a one-time state sales tax charge. Non-GAAP net income
(loss) consists of GAAP operating income (loss) as reported and adds
back the acquisition-related deferred revenue adjustment booked for GAAP
purposes and excludes amortization of intangibles, acquisition-related
expenses, share-based compensation expense, and a one-time state sales
tax charge.

Non-GAAP net income (loss) also excludes the tax provision.

We use these non-GAAP financial measures for internal managerial
purposes, when publicly providing our business outlook, and to
facilitate period-to-period comparisons. We describe limitations
specific to each non-GAAP financial measure below. Management generally
compensates for limitations in the use of non-GAAP financial measures by
relying on comparable GAAP financial measures and providing investors
with a reconciliation of the non-GAAP financial measures only in
addition to and in conjunction with results presented in accordance with
GAAP. We believe that these non-GAAP financial measures reflect an
additional way of viewing aspects of our operations that, when viewed
with our GAAP results, provide a more complete understanding of factors
and trends affecting our business. These non-GAAP measures should be
considered as a supplement to, and not as a substitute for, or superior
to, net income (loss) and net income (loss) per share calculated in
accordance with GAAP.

Accordingly, management and the Board of Directors do not consider these
excluded costs for purposes of evaluating the performance of the
business, and they exclude such costs when evaluating the performance of
the Company, its business units and its management teams and when making
decisions to allocate resources among the Company's business units.

Acquisition-related Deferred Revenue. Acquisition-related
deferred revenue adjustment reflects the fair value adjustment to
deferred revenues acquired in business combinations. The fair value of
deferred revenue represents an amount equivalent to the estimated cost
plus an appropriate profit margin, to perform services related to the
acquiree's software and product support, which assumes a legal
obligation to do so, based on the deferred revenue balances as of the
acquisition date. Guidance Software adds back this deferred revenue for
its non-GAAP financial measures because it believes the inclusion of
this amount directly correlates to the underlying performance of
Guidance Software operations and facilitates comparisons of pre-merger
results of legacy Guidance Software and CaseCentral to that of the
Company's post-merger results.

Acquisition-related Expenses. Acquisition-related expenses are
fees and expenses, including legal, investment banking and accounting
fees and other integration-related expenses, incurred in connection with
announced transactions. Guidance Software excludes acquisition-related
expenses from non-GAAP operating income and non-GAAP net income because
it believes (i) the amount of such expenses in any specific period may
not directly correlate to the underlying performance of Guidance
Software business operations and (ii) such expenses can vary
significantly between periods.

Amortization of Intangibles. Amortization of intangibles is a
non-cash expense arising from the acquisition of intangible assets in
connection with acquisitions. Guidance Software excludes
acquisition-related amortization expense from non-GAAP operating income
and non-GAAP net income because it believes (i) the amount of such
expenses in any specific period may not directly correlate to the
underlying performance of Guidance Software business operations and (ii)
such expenses can vary significantly between periods as a result of new
acquisitions and full amortization of previously acquired intangible
assets. Investors should note that the use of these intangible assets
contributed to revenue in the periods presented and will contribute to
future revenue generation and the related amortization expense will
recur in future periods.

Stock-based Compensation Expense. Stock-based compensation
expense is a non-cash expense arising from the grant of stock awards to
employees. Guidance Software excludes stock-based compensation expense
from non-GAAP operating income and non-GAAP net income because it
believes (i) the amount of such expenses in any specific period may not
directly correlate to the underlying performance of Guidance Software
business operations and (ii) such expenses can vary significantly
between periods as a result of the timing of grants of new stock-based
awards, including grants in connection with acquisitions. Investors
should note that stock-based compensation is a key incentive offered to
employees whose efforts contributed to the operating results in the
periods presented and are expected to contribute to operating results in
future periods and such expense will recur in future periods.

State Sales Tax One-time Charge. The sales tax one-time charge is
expenses accrued for sales taxes that may be due to a taxing authority.
Guidance Software excludes the sales tax charge from non-GAAP operating
income and non-GAAP net income because it believes the amount of the
expense in the specific period it occurred is a one-time charge and does
not directly correlate to the underlying performance of Guidance
Software’s business operations.

Forward Looking Statements:

This news release contains forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Investors are cautioned that forward-looking
statements in this release involve risks and uncertainties that could
cause actual results to differ materially from current expectations.
There can be no assurance that demand for the Guidance Software's
products will continue at current or greater levels, or that the Company
will continue to grow revenues, or be profitable. There are also risks
that the Guidance Software's pursuit of providing network security and
eDiscovery technology might not be successful, or that if successful, it
will not materially enhance the Guidance Software's financial
performance; that the Company could fail to retain key employees; that
changes in customer requirements and other general economic and
political uncertainties could impact the Guidance Software's
relationship with its customers; and that delays in product development,
competitive pressures or technical difficulties could impact timely
delivery of next-generation products; and other risks and uncertainties
that are described from time to time in Guidance Software's periodic
reports and registration statements filed with the Securities and
Exchange Commission. The Company specifically disclaims any
responsibility for updating these forward-looking statements.

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